17.05.2018

Cold war nostalgia

Mike Macnair looks at the AWL’s version of ‘socialism’ and finds it wanting

A couple of weeks ago I wrote a critique of the Alliance for Workers’ Liberty’s April 11 issue of Solidarity.1 The May 9 issue is not quite as uniformly bad: it carries a useful (if a bit naive) interview with a Brazilian revolutionary socialist about pitfalls of taking governmental office, demonstrated by the case of the Brazilian Workers Party, and Bruce Robinson’s translation of Joseph Dietzgen’s 1868 review of Marx’s Capital volume 1.

On the other hand, three columns are given over to an incoherent ‘Response to critics’ by Ashok Kumar, and more than three pages to Sean Matgamna’s demagogic defence of the AWL in response to him. Kumar tweets as “@broseph_stalin” - which I guess is an indication of his underlying politics - but is also on the editorial board of Historical Materialism. His piece is deeply unclear.

Matgamna’s long response is not really worth discussing: if anything, it merely displays at length the evidence for the point I made two weeks ago, that the only element of continuity in the AWL’s international policy over recent decades is rejection of any opposition to British foreign policy. I made the point that the AWL’s dependence on British establishment media ideas had now drifted well beyond its long-standing ‘anti-anti-imperialism’, into tailing the liberals both on Brexit and on the rise of the far right in eastern Europe.

If there was any sort of a socialist argument for this sort of policy, it would be a variant on the Russian ‘economist’ line: to argue that dropping disagreement with the capitalist media over foreign policy issues would allow a focus on the ‘real’ economic issues.

On this sort of argument, one would expect to find radicalism in the AWL’s economic proposals. And this is what we might think we are about to get with Solidarity’s front page, tailored to the May 12 TUC demonstration. The TUC’s slogan for the demo was “a new deal for working people” (a delusive attempt to appeal to US Democratic Party traditions) and the AWL’s headline responds: “The ‘new deal’ we want: socialism.”

Thin

The beef is no doubt supposed to appear in the ‘What we say’ leader column on page 5. This is, however, pretty thin. About a quarter of the page is devoted to an advert for the AWL’s summer school, Ideas for freedom (this year titled ‘Socialism makes sense’).

Then there is a box titled ‘Fight for workers’ rights’. This tells us that (as pretty much everyone knows) the growth of inequality since the 1980s is linked to the decline of trade unions and their rights. It reiterates the point that Labour conference last year voted for the repeal of the anti-union laws introduced since the 1980s; but that the Labour leadership is publicly promising only the repeal of David Cameron’s 2015 act and a ‘right to join a trade union’ which technically already exists. The question why what is supposed to be a radically left Labour leadership will not go beyond calling for a return to the law as it stood in 2010 is not really addressed. There is only a claim that “a conversation is urgently needed” about the issue, and a call for a support for an initiative taken by the AWL’s Labour-left broad-front project The Clarion - butwhich is not described.

That leaves a bit less than half a page for ‘The new deal we want: socialism!’ Of this, four and a half column inches is taken up with a photo, captioned: “The TUC should campaign on more radical economic policies, such as nationalising the big six energy companies”.

This pretty much gives us the flavour of the actual article. It is written as if addressed to the TUC. The core of the article tells us:

Britain’s trade union movement will be a powerful partner for Labour in government, backing and fighting for policies that will surely be under attack from the capitalists, and the media. That is why May 12 must be the starting point of our trade unions gearing up for that government organisationally and politically.

The TUC’s demands for the demonstration are Labour demands and are good, as far as they go: fund the NHS and public services, ban zero-hours contracts, up the minimum wage to £10 per hour, repeal the Trade Union Act and crack down on tax dodgers. But do these demands amount to a “new deal”?

If the TUC were even to amplify Labour’s existing policies, for a more redistributive tax system and to renationalise the railways and some utilities, it would have a more coherent message.

In fact, to be able to get a real grip on economic life currently mired in capitalist profiteering, the TUC and Labour need more radical economic measures, such as wholesale nationalisation of the big six energy companies, under workers’ control, and bringing high finance under public ownership and democratic control.

We need socialist policies, geared to replacing profit as the motor of economic life by working class democracy and principles of social solidarity.

At this point the article moves away from substantive policies, to the idea that trade unions need to turn outwards to organise the unorganised, and stating: “Despite all that is good about the TUC event, it lacks ambition. Fundamentally that is because union members have not nearly enough power over deciding the unions’ political priorities.”

Which leads in turn to issues of trade union democracy. Both the need to organise the unorganised and the need for trade union democracy are entirely valid points, but only in a remote sense can they be equated with “socialism”.

Finally, the article ends with a little dig, which would be entirely shared by the Labour right, against the Corbyn leadership’s refusal to come out with an openly anti-Brexit stance: “More than ever we need trade unions that want to organise across the entire working class ... Including, not ignoring, our fellow workers from the EU, who need us to carry on fighting for freedom of movement.”

The four paragraphs I have quoted earlier are, therefore, the sum total of what the AWL has to say in a leader column headed “The new deal we want: socialism!’, which was also the front-page banner of the paper. The leader says that the TUC’s event “lacks ambition”. True. But then the AWL’s version, coming from a group which (falsely) identifies itself as Trotskyist, stunningly “lacks ambition”.

The AWL endorses, as Labour policies, TUC demands to “fund the NHS and public services, ban zero-hours contracts, up the minimum wage to £10 per hour, repeal the Trade Union Act and crack down on tax dodgers.” These are pretty minimalist and would mostly have been backed by Ed Miliband and some of them by Gordon Brown.

It adds that the TUC “would have a more coherent message” if it were to “amplify Labour’s existing policies, for a more redistributive tax system and to renationalise the railways and some utilities”. The points are again pretty minimalist. Brown as chancellor engaged in fairly extensive covert redistribution; conversely, Tory chancellors since 2010 have also engaged in covert redistribution towards Tory voters - a recent example being the announcement of additional funding for grammar and church schools. The Blair government effectively renationalised Railtrack when it went bust in 2002, and the Con-Dem government finally admitted that Network Rail is a public-sector organisation in 2014.

As for the need for “more radical economic measures, such as wholesale nationalisation of the big six energy companies, under workers’ control, and bringing high finance under public ownership and democratic control”, what is supposed to be the difference between nationalising the energy companies under workers’ control, and nationalising “high finance” (whatever that means) under democratic control?

There is, no doubt, a theoretical difference: “workers’ control” of ‘high finance’ would be the control by the actual City bankers and brokers which already largely exists. But the supposition here is that the “big six energy companies” are actual producers, when the reality is that they are financial and billing operations trading on infrastructure provided by National Grid plc and its subsidiary in the gas business, Transco.

It would no doubt be a good idea to restore publicly owned infrastructure in the natural monopolies, but it is hardly radically anti-capitalist. In the early 19th century, an experiment with artificially created competition between London water companies had such destructive consequences that it was reversed by agreements between the companies, and these local monopolies were then nationalised by the Tory government in 1902.2

Further, the infrastructural character of these industries means that - unlike, for example, breweries - they impact on the whole economy. This means that they precisely require, for socialists, democratic control (by the whole society) rather than merely workers’ control (by workers in the firm alone).

Finance

At the point of “bringing high finance under public ownership and democratic control” in order “to get a real grip on economic life” we arrive at another very strange feature of the AWL’s ‘socialism’. That is, this (falsely) self-identified Trotskyist organisation, which also opposes Brexit, is effectively advocating a policy of socialism in one country.

And this issue of Solidarity, which a few pages later prints Dietzgen’s review of Marx’s Capital volume 1, here ignores the most fundamental lesson of that book: that the Proudhonist nostrum of tinkering with the financial system, without bringing production under social control, leads only to a variant on capitalism - so that Proudhon’s proposals for interest-free lending on the security of movables become used as a political cover for ... Louis Bonaparte’s Crédit Mobilier bank.3

To see why, we have to begin with some recent history. Yanis Varoufakis imagined that Syriza and the left more generally could save capitalism from itself. It turned out, however, that the banks and their ordo-liberal (and so on) agents preferred power: that is, in the particular case, to crush Greek dissent, over actual profitability.4 There is an enormous mass of similar evidence. Public ownership anddemocratic control of “high finance” in Britain alone would certainly attract analogous measures of financial retaliation and/or ‘sanctions’ from the European Union, the United States, the International Monetary Fund and so on.

It would also be unambiguously illegal under EU ‘state aid’ law. We were recently reminded of this by the TSB online banking meltdown - derived from the EU’s requirement under these rules that Lloyds divest itself of TSB, the point being that the limited nationalisations to save the banks in the wake of 2007-08 were in principle illegal.5 And on May 7, too, EU officials told The Times that they were taking a hard line in Brexit negotiations because of fears that a Corbyn government would repudiate these ‘state aid’ rules.

Behind these points is the fact that the UK has a very large deficit in trade in goods, to a considerable extent accounted for by food imports. This is due to the fact that just under 50% of food consumed in the UK is produced here: ie, UK agriculture alone cannot feed the UK population.6 The overall deficit in the balance of trade is (largely) made up by a better trade balance in ‘services’. This, in turn, includes a large element of financial, legal and accountancy services.7 In very rough approximation, the UK population is able to pay for about half of what we eat because “high finance” and related legal and accountancy services skim large amounts of money from global transactions unrelated to UK-based productive activity.

The ability of the City to bring this money in is not a matter of the underlying productive weight of the UK economy. On the contrary, like the 18th century Netherlands or 16th-17th century Venice or Genoa, the role of production in the UK has declined in the 20th century (and more sharply from the 1980s), but the financial structures developed (in Britain’s case round the old shipping industry) persist, serving the world economy and simultaneously leaching off it.

The pound is money because it is world money, exchangeable against the euro and, in particular, the dollar. In the early 21st century, the effects of British-led financial sanctions against Zimbabwe, and of US-led financial sanctions against Iran, in triggering hyperinflation have made that principle utterly clear.

But then the consequence is that for Britain alone to nationalise “high finance” under democratic control would be merely to kill the goose that lays the golden eggs, inviting sanctions which would be likely to starve millions.

The AWL’s leader article formally proposes that “We need socialist policies, geared to replacing profit as the motor of economic life by working class democracy and principles of social solidarity.” But it fails to recognise that working out such policies requires the working class to lay collective hands on production, and to plan at least in part ‘in natura’, on the basis of the physical things we want.

As long as the money system remains the basis of our plans - as it does both in “a more redistributive tax system” and in “bringing high finance under public ownership and democratic control”, the controllers of world money dominate every individual state.

But then the converse of this is that actually to implement socialist policies requires action on a European scale. Neither Greece nor Britain is capable of standing off economic attack through economic autarky. Europe as a whole has the productive capabilities to do what the very large, but backward, USSR and China could not do - that is, break up capitalism as a global system.

It is thus, as I said, paradoxical that the ‘remainer’ AWL proposes the ‘Lexiteer’ idea of nationalisation of “high finance”. The underlying problem is that the AWL’s ‘remainism’ is merely tailing the liberals and the Labour right: hence Martin Thomas’s article in this issue, ‘Rewind Labour’s policy on Europe’, downplays the internationalisation of production as a problem for socialism, in favour of a moral imperative of free movement of labour as a reason to back a Tory pro-single market amendment.

Hence, equally, the AWL does not argue for the overthrow of EU treaties which entrench commitments to privatisation, against ‘state aids’, for budget deficit limits, the Viking and Laval decisions and so on: clinging to the EU comes first.

And hence, in turn, an AWL version of ‘socialism’ which is little more than nostalgia for cold war social democracy, with a utopian proposal to nationalise “high finance” tacked on.